Whistleblowing can be good for everyone (except the badies).

The only standout success as a law for whistleblowers is the United States ‘False Claims Act’.

Whistleblowers can go to a lawyer and file a claim in Court. The claim is for the value lost to the Public (taxpayer) by fraud, corruption or incompetence in the public service, plus the penalty.

The total penalty under the False Claims Act is treble the value of the fraud. The whistle blower gets 15% to 30% of the penalty. The government gets the rest.

The US government has recovered one Billion US Dollars a year since 1986.

The Washington Post published today that the law is to be changed to include fraud in companies regulated by the Securities and Exchange Commission (SEC). The controversy is whether the employer or company should be alerted by the whistleblower before filing the claim in Court.

The problem with forcing the whistleblower to go to the employer or company first is that whistleblowers are more frequently subjected to reprisals and destruction of their careers by the employer than they are to be valued. Their careers are often destroyed by bullying and mobbing. Employers appear to be more likely to ‘cover-up’ the fraud than they are to applaud the whistleblower.

There appears to be too great a conflict of interest for an organisation to regulate itself. Regulation needs to be external.

Hopefully Australia will embrace a law similar to the False Claims Act. Although intended to addresses fraud, it appears that it can be used to address the waste of taxpayer’s funds through negligence or incompetence as well.